July 6, 2009

Dollar Under Threat As The Global Currency

India is the latest country to cast doubt on the U.S. dollar as the major global currency. Suresh Tendulkar, a top government economist, has advised India to rely less on the dollar. He suggests buying a number of different currencies instead of just the greenback. He told reporters: “The major part of Indian reserves is in dollars. That is something that’s a problem for us.” India’s treasury holds over $260 billion in foreign currency reserves. A weaker dollar means those reserves could fall in value. This is especially possible with the pressure on the dollar from America’s weakening economy. This may not exactly be the final nail in the coffin for the dollar, but it seems to be losing ground on other currencies.

The dollar is not only under attack from India’s economists. China and Russia are also calling for a new international foreign-exchange reserves system. On July the 3rd, China’s former Vice Premier Zeng Peiyan called for a “system to maintain the stability of the major reserve currencies.” This suggests China no longer views the American dollar as the world’s sole reserve currency, and that the dollar is no longer the “system” at the heart of global financial markets. Russian President Dmitry Medvedev has repeatedly called for a system that has a mix of currencies. Japan appears to be the only economic power that is keeping faith with the dollar. This may change at a meeting of the G-8 in Italy on July 8-10.

WARM-UPS

1. THE U.S. DOLLAR: Walk around the class and talk to other students about the U.S. dollar. Change partners often. Sit with your first partner(s) and share your findings.

2. CHAT: In pairs / groups, decide which of these topics or words from the article are most interesting and which are most boring.

Have a chat about the topics you liked. Change topics and partners frequently.

3. WORLD MONEY: Should there be a single world currency? Complete this table with your partner(s). Change partners and talk about your ideas. Change again and share what you heard.

Your ideas

Name

Value of notes/coins

Design

The symbol / logo

Anti-forgery features

Bank headquarters

4. THE END: Students A strongly believe the U.S. dollar will lose its status as the global currency; Students B strongly believe the U.S. dollar will always be number one. Change partners again and talk about your conversations.

5. WORLD MONEY: What do you think about the world’s currencies? Talk about these with your partner(s). Do you have a positive or negative image about them? Why? Change partners and share what you heard.

U.S. dollar

Euro

Japanese yen

Russian ruble

Chinese yuan

Indian rupee

Mexican peso

Saudi riyal

6. GLOBAL: Spend one minute writing down all of the different words you associate with the word ‘global’. Share your words with your partner(s) and talk about them. Together, put the words into different categories.

BEFORE READING / LISTENING

1. TRUE / FALSE: Look at the article’s headline and guess whether these sentences are true (T) or false (F):

a.

India’s rupee will soon overtake the U.S. dollar as the world currency.

T / F

b.

A top Indian economist advised his country to sell all of its dollars.

T / F

c.

The economist said it’s a problem to rely too much on the dollar.

T / F

d.

The economist’s words pretty much means the death of the dollar.

T / F

e.

The dollar is only under attack from India.

T / F

f.

A Chinese official called for a system to maintain stability in currencies.

T / F

g.

Russia’s president called for a system that has a mixture of currencies.

T / F

h.

A meeting between the top economic powers is to take place in Italy.

T / F

2. SYNONYM MATCH: Match the following synonyms from the article:

1.

cast doubt on

a.

only

2

rely

b.

finance department

3.

treasury

c.

belief

4.

reserves

d.

depend

5.

losing ground on

e.

keep

6.

former

f.

blend

7.

maintain

g.

express uncertainty

8.

sole

h.

stocks

9.

mix

i.

ex-

10.

faith

j.

falling behind

3. PHRASE MATCH: Match the following phrases from the article (sometimes more than one. combination is possible):

1.

cast doubt on

a.

financial markets

2

over $260 billion in foreign

b.

on other currencies

3.

the pressure on the dollar from

c.

the stability

4.

the final nail

d.

reserve currency

5.

it seems to be losing ground

e.

currency reserves

6.

not only under attack

f.

America’s weakening economy

7.

a system to maintain

g.

the U.S. dollar

8.

the world’s sole

h.

is keeping faith

9.

the heart of global

i.

in the coffin

10.

the only economic power that

j.

from India’s economists

WHILE READING / LISTENING

GAP FILL: Put the words into the gaps in the text.

India is the ____________ country to cast doubt on the U.S. dollar as the major global currency. Suresh Tendulkar, a top government economist, has ____________ India to rely less on the dollar. He suggests buying a number of different currencies ____________ of just the greenback. He told reporters: “The major part of Indian reserves is in dollars. That is something that’s a ____________ for us.” India’s treasury holds over $260 billion in foreign currency reserves. A ____________ dollar means those reserves could fall in value. This is especially possible with the ____________ on the dollar from America’s weakening economy. This may not ____________ be the final nail in the coffin for the dollar, but it seems to be losing ____________ on other currencies.

weakerproblemadvisedexactlygroundlatestpressureinstead

The dollar is not only ____________ attack from India’s economists. China and Russia are also ____________ for a new international foreign-exchange reserves system. On July the 3rd, China’s former Vice Premier Zeng Peiyan called for a “system to ____________ the stability of the major reserve currencies.” This suggests China no longer views the American dollar as the world’s ____________ reserve currency, and that the dollar is no longer the “system” as the ____________ of global financial markets. Russian President Dmitry Medvedev has repeatedly called for a system that has a ____________ of currencies. Japan appears to be the only economic power that is keeping ____________ with the dollar. This may ____________ at a meeting of the G-8 in Italy on July 8-10.

mixcallingsolechangeunderheartfaithmaintain

LISTENING: Listen and fill in the gaps.

India is the latest country _________________ the U.S. dollar as the major global currency. Suresh Tendulkar, a top government economist, has advised India _________________ the dollar. He suggests buying a number of different currencies _________________ greenback. He told reporters: “The major part of Indian reserves is in dollars. That is something that’s a problem for us.” India’s treasury holds over $260 billion in foreign currency reserves. A weaker dollar _________________ could fall in value. This is especially possible with the pressure on the dollar from America’s weakening economy. This may not exactly be the _________________ coffin for the dollar, but it seems to be _________________ other currencies.

The dollar is _________________ attack from India’s economists. China and Russia are also calling for a new international foreign-exchange reserves system. On July the 3rd, China’s former Vice Premier Zeng Peiyan called for a “_________________ the stability of the major reserve currencies.” This suggests China _________________ the American dollar as the world’s sole reserve currency, and that the dollar is no longer the “system” _________________ global financial markets. Russian President Dmitry Medvedev has repeatedly called for a system that _________________. Japan appears to be the only economic power that _________________ the dollar. This may change at a meeting of the G-8 in Italy on July 8-10.

Do you think the Chinese yuan might one day replace the dollar as the major world currency?

c)

Do you think countries like Russia and China are jealous of the dollar?

d)

Would you trust America’s financial policies or China’s?

e)

What do you think of the idea of a single world currency?

f)

What do you think of the idea of a mix of world currencies?

g)

Why do you think Japan is the only major power keeping faith with the dollar?

h)

What should the G-8 countries talk about when they meet?

i)

Have you ever bought and sold foreign currencies?

j)

What questions would you like to ask Mr. Tendulkar about the dollar?

LANGUAGE

India is the latest country to (1) ____ doubt on the U.S. dollar as the major global currency. Suresh Tendulkar, a top government economist, has (2) ____ India to rely less on the dollar. He suggests buying a number of different currencies instead of just the greenback. He told reporters: “The major (3) ____ of Indian reserves is in dollars. That is something that’s a problem for us.” India’s treasury holds over $260 billion (4) ____ foreign currency reserves. A weaker dollar means those reserves could fall in value. This is especially possible with the pressure (5) ____ the dollar from America’s weakening economy. This may not exactly be the final nail in the coffin for the dollar, but it seems to be (6) ____ ground on other currencies.

The dollar is not only (7) ____ attack from India’s economists. China and Russia are also calling for a new international foreign-exchange reserves system. On July the 3rd, China’s (8) ____ Vice Premier Zeng Peiyan called for a “system to maintain the stability of the major reserve currencies.” This (9) ____ China no longer views the American dollar as the world’s sole reserve currency, and that the dollar is no longer the “system” (10) ____ the heart of global financial markets. Russian President Dmitry Medvedev has (11) ____ called for a system that has a mix of currencies. Japan appears to be the only economic power that is keeping faith with the dollar. This may change at a meeting of the G-8 in Italy on July 8-10.

Put the correct words from the table below in the above article.

1.

(a)

cyst

(b)

cost

(c)

coast

(d)

cast

2.

(a)

advised

(b)

advice

(c)

advisory

(d)

advises

3.

(a)

partner

(b)

party

(c)

part

(d)

partly

4.

(a)

on

(b)

in

(c)

for

(d)

to

5.

(a)

in

(b)

on

(c)

at

(d)

to

6.

(a)

loses

(b)

lost

(c)

losing

(d)

loss

7.

(a)

under

(b)

over

(c)

below

(d)

above

8.

(a)

farmer

(b)

firmer

(c)

framer

(d)

former

9.

(a)

suggestion

(b)

suggest

(c)

suggesting

(d)

suggests

10.

(a)

by

(b)

at

(c)

pump

(d)

attack

11.

(a)

repeatedly

(b)

repetition

(c)

repeats

(d)

repeating

12.

(a)

faithful

(b)

faithless

(c)

faith

(d)

faiths

WRITING:

Write about the U.S. dollar for 10 minutes. Correct your partner’s paper.

HOMEWORK

1. VOCABULARY EXTENSION: Choose several of the words from the text. Use a dictionary or Google’s search field (or another search engine) to build up more associations / collocations of each word.

2. INTERNET: Search the Internet and find out more about the U.S. dollar. Share what you discover with your partner(s) in the next lesson.

3. CURRENCIES: Make a poster about different currencies in the world. Show your work to your classmates in the next lesson. Did you all have similar things?

4. WORLD MONEY: Write a magazine article about a single world currency. Include imaginary interviews with people in favour of and against this idea.

Read what you wrote to your classmates in the next lesson. Write down any new words and expressions you hear from your partner(s).

5. LETTER: Write a letter to America’s head of the Treasury. Ask him three questions about the U.S. dollar. Give him three reasons why the dollar should no longer be the sole reserve currency. Read your letter to your partner(s) in your next lesson. Your partner(s) will answer your questions.

ANSWERS

TRUE / FALSE:

a.

F

b.

F

c.

T

d.

F

e.

F

f.

T

g.

T

h.

T

SYNONYM MATCH:

1.

cast doubt on

a.

express uncertainty

2

rely

b.

depend

3.

treasury

c.

finance department

4.

reserves

d.

stocks

5.

losing ground on

e.

falling behind

6.

former

f.

ex-

7.

maintain

g.

keep

8.

sole

h.

only

9.

mix

i.

blend

10.

faith

j.

belief

PHRASE MATCH:

1.

cast doubt on

a.

the U.S. dollar

2

over $260 billion in foreign

b.

currency reserves

3.

the pressure on the dollar from

c.

America’s weakening economy

4.

the final nail

d.

in the coffin

5.

it seems to be losing ground

e.

on other currencies

6.

not only under attack

f.

from India’s economists

7.

a system to maintain

g.

the stability

8.

the world’s sole

h.

reserve currency

9.

the heart of global

i.

financial markets

10.

the only economic power that

j.

is keeping faith

GAP FILL:

Dollar under threat as the global currency

India is the latest country to cast doubt on the U.S. dollar as the major global currency. Suresh Tendulkar, a top government economist, has advised India to rely less on the dollar. He suggests buying a number of different currencies instead of just the greenback. He told reporters: “The major part of Indian reserves is in dollars. That is something that’s a problem for us.” India’s treasury holds over $260 billion in foreign currency reserves. A weaker dollar means those reserves could fall in value. This is especially possible with the pressure on the dollar from America’s weakening economy. This may not exactly be the final nail in the coffin for the dollar, but it seems to be losing ground on other currencies.

The dollar is not only under attack from India’s economists. China and Russia are also calling for a new international foreign-exchange reserves system. On July the 3rd, China’s former Vice Premier Zeng Peiyan called for a “system to maintain the stability of the major reserve currencies.” This suggests China no longer views the American dollar as the world’s sole reserve currency, and that the dollar is no longer the “system” at the heart of global financial markets. Russian President Dmitry Medvedev has repeatedly called for a system that has a mix of currencies. Japan appears to be the only economic power that is keeping faith with the dollar. This may change at a meeting of the G-8 in Italy on July 8-10.